AP retracts story on Terry McAuliffe lie claim

A chaotic episode erupted in the Virginia gubernatorial race late Wednesday, as The Associated Press published and then retracted a story that said court documents alleged Democratic candidate Terry McAuliffe had lied to a federal official.

AP sent a news alert at 9:45 p.m. that read “Court records: McAuliffe lied to postal inspector investigating RI death benefits scam,” followed by a story. The story said McAuliffe’s campaign had not responded to requests for comment.

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The campaign swiftly denied the story to NBC 12 in Richmond, a response it confirmed to POLITICO. The AP issued a rare withdrawal notice for the story landing at 11:25 p.m. — a major blow to an organization that distributes news to member organizations worldwide, many of which post alerts and stories to the Web almost instantaneously, potentially prolonging the lifespan of any error.

At issue are documents in a death-benefits scheme case against a Rhode Island man, Joseph Caramadre, and his former employee. They pleaded guilty to identity theft and wire fraud charges in 2012, according to the investigative news outlet ProPublica. Prosecutors submitted documents in federal court Wednesday identifying Caramadre investors, according to the Providence Journal. McAuliffe was among those identified.

“Terry was one of hundreds of passive investors several years ago and had no idea about the allegations against the defendant - who, at the time, was widely respected by business leaders and elected officials,” spokesman Josh Schwerin said in an email. “The allegations are horrible and he never would have invested if he knew he was being deceived.”

The indictment identifies someone as “T.M.” on page 68 and says “T.M. intentionally lied to the Postal Inspector” about a $2,000 check from Caramadre.

“The person referenced on page 68 is absolutely not Terry McAuliffe since he was a passive investor and did none of the things referenced,” Schwerin said. “First, he was not interviewed by law enforcement on April 20, 2010; rather, he was in Richmond for a day of meetings. Second, he was never involved in the referral of any annuitants to Mr. Caramadre, ever.”

That was followed by AP’s retraction, which it said it began transmitting at 11:23 p.m.

“The indictment did not identify McAuliffe as the ‘T.M.’ who allegedly lied to investigators,” the wire service said in a statement.

”The initial alert moved on AP’s Virginia state wire at 9:45 p.m.,” AP spokesman Paul Colford said in a statement. “The story was withdrawn one hour and 38 minutes later. That was an hour and 38 minutes too long.”

The original alert set off an uproar on Twitter, which only intensified after the McAuliffe camp’s denial and AP’s backtrack.

Observers marveled over the developments in a race that has already been marred by accusations of unethical behavior by both sides — McAuliffe and his Republican opponent, Ken Cuccinelli. They have mainly concerned McAuliffe’s involvement in the car company GreenTech and Cuccinelli’s acceptance of gifts from embattled Star Scientific CEO Jonnie Williams.

“Say what you will about Cuccinelli, and many of his troubles are self-inflicted,” tweeted Kyle Kondik of the University of Virginia Center for Politics, “but man this guy cannot catch a break.”

Earlier Wednesday, the Cuccinelli campaign had responded to McAuliffe being identified as an investor. “There is no question that this is a deeply troubling story, and what it reveals most of all is yet another glaring example of Terry McAuliffe doing business with highly dubious individuals,” strategist Chris LaCivita said in a statement.

The election is Nov. 5. It’s the only competitive gubernatorial race of the year and McAuliffe has gained a substantial lead in polls in the purple state.